Cyprus company registration and formation with professional services

A Cyprus trading company can be used for the invoicing / re-invoicing of goods and services (as well as for the receipt of trading commissions) from any country to any destination and for transit trade activities in combination with the operation of bonded warehouses, bonded factories and the free trade zones.

Cyprus Companies may provide services such as sales promotion, accounting function, provision of labour – executive staff, consulting, market research, commission agency, intermediation, client introduction and many others. They may employ expatriate staff, who benefit from double tax treaty provisions, by paying tax and social insurance in Cyprus at low rates, thus avoiding the high tax rates in their home country.

Cyprus offers the lowest burden of taxation in the entire EU

* A company resident in Cyprus (management & control is in Cyprus) is subject to 10% corporate tax on its worldwide income
* Income arising from ship management activities is subject to a special rate of 4,25% or tonnage tax
* No tax on gains from: (a) sale of securities (such as founder shares, public shares, bonds, debentures, etc), (b) sale of real estate located outside Cyprus provided it is of a capital nature, and (c) surpluses from an overseas company liquidation

There are no specific rules on transfer pricing

* The general rule is that all transactions should be at an arms length basis

There are no thin capitalization rules

* Capital can be supplied primarily by loans from shareholders rather than stock investment. The main tax advantage of this is that the distributions of interest on the debt are fully deductible from corporate income tax whereas dividend distributions on stock are non-deductible.

Unilateral tax credit relief is given on taxes suffered abroad

* Foreign tax on income can in many circumstances be credited against Cyprus tax payable over such income or gains

Loss compensation

* Companies may carry forward corporate tax losses, without adjustment for inflation, indefinitely. Loss carry backs are not allowed.

Transfer of losses within groups of companies

* Group loss relief in respect of the loss for the year is allowed between resident group companies that meet certain criteria

No taxes on reorganizations based on the EU Merger Directive (includes mergers, divisions, transfer of assets, exchange of shares)

* No taxes arise on the transfer of business or assets or the exchange of shares

Contact us to register a Cyprus Trading Company

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